On February 27, 2013, the Supreme Court of the United States in Gabelli v. SEC unanimously disapproved of the so-called discovery rule for postponing the running of a statute of limitations when a federal government agency seeks a civil penalty. The Court held that the limitations period begins to run once a violation occurs, and is not postponed until the agency discovers or reasonably should have discovered the violation. (See "Supreme Court Rules SEC Has Five Years to Seek Penalties" for more information.)
Although the Gabelli decision did not directly deal with the Occupational Safety and Health (OSH) Act, it effectively eliminates what might have remained of the OSH Review Commission's 1993 Johnson Controls decision, which had endorsed the use of a discovery rule in Occupational Safety and Health Administration (OSHA) recordkeeping cases.
Together with the U.S. Court of Appeals for the District of Columbia Circuit's decision in AKM LLC dba Volks Constructors v. Secretary of Labor, 675 F.3d 752 (D.C. Cir. 2012), Gabelli ends any possibility of OSHA extending the OSH Act's limitations period. In Volks (in which McDermott represented the employer), the D.C. Circuit disapproved of OSHA's continuing violation theory, under which the limitations period does not begin to run until the violation is corrected. Although the D.C. Circuit reserved in a footnote whether OSHA might use a discovery rule to extend the limitations period, the Gabelli decision eliminates that possibility.
As a result, employers should not accept an OSHA citation alleging violations more than six months old.
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